If I had to make a call on a bounce again this week or tonight based on a lot of charts, I'd say it would be very difficult to see any real strong market upside at all, there's very few areas that even have some of the short term enthusiams that has lifted the markets in afternoon trade. Index Futures look especially weak, as a matter of fact the only place I can find any buying excitement in underlying trade is VIX futures and that's not good for the market.
If it weren't for the 5 min charts in the SPY, QQQ and DIA (10 min in the R2K), I'd not be looking for a bounce at all.
In fact, today's end of day action in 3C looked horrible (as it has for nearly a week which has led to weak a.m. action and afternoon recoveries), I started with the SPY and was surprised at how much worse it looked than it has recently (but the 5 min positive is still there-the bounce), then I looked at the NASDAQ 100 expecting to see better looking charts after the Icahn/AAPL tweet, what I saw was EVEN WORSE than the SPY. The IWM and DOW were EVEN WORSE than the R2K.
This is above and beyond the normal recent EOD weakness.
HYG was flat today and I'm talking about "vs the SPX", but it literally was flat at 0%, Junk Credit was worse with end of day weakness, only High Yield was in line, but not really leading with any enthusiasm. VXX was pretty much right as it should be considering the normal correlation, TLT was weaker in the a.m., significantly vs the correlation, but I've expected this from TLT as well as signs of accumulation which there have been which "should" make TLT a long worth considering or adding to.
As far as Treasury futures, they've lost nothing but ground since yesterday's open, but as I showed you at least a week ago, the difference in underlying trade is striking between the 10 year and the 30 year (closer to TLT), the 10-year doesn't look like it's worth any consideration as a long whereas the 30 year has positive signals in futures as well as TLT.
Commods were oddly flat today vs the SPX, from futures it looks like both Gold and Silver will lose ground, but silver has longer term signals that look good so a pullback in silver may indeed set up a long position. USO has some significant weakness, it's just a matter of a good entry and I think we'll see some real downside there.
I mentioned another site that was making the argument that the USD/JPY carry cross abandoned US assets to buy PIIGS bonds, something I wasn't quite sure I agreed with, but I did see and point out a rotation to another carry cross, the AUD/JPY and I see after hours this same site pointed out what I had pointed out much earlier in the day (I mention it just because they have some decent analysis from time to time on carry trades).
Short term the AUD looks like it could take the market further, short term the $USD looks like it will stay out of rotation a bit longer. While we are on it, the Nikkei futures look like this tonight...
US Index futures aren't even worth mentioning or showing, they look VERY uninspired. The best I see on a shorter term basis is a bullish hammer (upside reversal candlestick), one in the NASDAQ 100 too, the Dow looks more like a long-leegged Star (not quite as bullish for a short term reversal) and the R2K doesn't have anything going on, it looks very "BLAH".
Internals are no better, there has been NOTHING even approaching a dominant price /volume relationship for at least a week, again, "blah" internals that appear to be "Summer Doldrums", but I suspect it's something a bit more serious.
Sentiment on a short term basis today was in line with the price action in the SPX, that's a positive, but it wasn't leading or showing any "Real" excitement and of course, the longer term sentiment readings are horribly bearish.
There really isn't much more to say, I'M JUST LOOKING FORWARD TO ANY PRICE STRENGTH SETTING UP SHORTS, before some of the better ones crumble (take AMZN's price action for example, I'm glad I already set up the bulk of that core short and this is why I do it before we reach the cliff).
HYG and the 4 averages in the 5-15 min range are all that keeps the notion of a bounce alive, everything else looks really weak, I'd say uninspired, but I know it's something much more than that. The charts before those single charts that represent a bounce look weak as if there have been smaller block trades going through as distribution in to afternoon price recovery (or strength if we can call it that) and the long term damage on any chart above that single bounce chart in each of the averages is SOLIDLY leading negative.
In other words, like I said last week, chasing a bounce here is akin to chasing nickels and dimes in front of a steam roller and I feel bad for any longs that get sucked in to chasing the market on a bounce because I think they are going to get the worst of it. Just to be clear, I don't think we are close to the start of the big picture, I think we are already in it.
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